Food addiction has two Macroeconomic impacts: the share price of the purveyors of ultra-processed foods and the extremely high cost of the health burden of ultra-processed foods.
The gorgeous blonde beauty-contestant daughter of a friend got a job with PepsiCo. I congratulated her but didn’t mention that few of the heavy consumers of Pepsi’s products eventually resemble this lovely young woman. I can’t safely eat any of Pepsi’s products except their bottled water – and I avoid bottled water to avoid adding to the problem of single-use plastics.
PEP, KO, MCD and YUM all have P/E ratios over 20. Their prices are back to pre-pandemic levels.
Food researchers debate whether highly processed foods like potato chips and ice cream are addictive, triggering our brains to overeat.
Feb. 18, 2021
In one study involving more than 500 people, Ashley Gearhardt, associate professor in the psychology department at the University of Michigan and her colleagues found that certain foods were especially likely to elicit “addictive-like” eating behaviors, such as intense cravings, a loss of control, and an inability to cut back despite experiencing harmful consequences and a strong desire to stop eating them.
At the top of the list were pizza, chocolate, potato chips, cookies, ice cream, French fries and cheeseburgers. Dr. Gearhardt has found in her research that these highly processed foods share much in common with addictive substances. Like cigarettes and cocaine, their ingredients are derived from naturally occurring plants and foods that are stripped of components that slow their absorption, such as fiber, water and protein. Then their most pleasurable ingredients are refined and processed into products that are rapidly absorbed into the bloodstream, enhancing their ability to light up regions of the brain that regulate reward, emotion and motivation…
A common denominator among the most irresistible ultra-processed foods is that they contain large amounts of fat and refined carbohydrates, a potent combination that is rarely seen together in naturally occurring foods that humans evolved to eat…[end quote]
Is now a good time to buy these stocks despite their rich valuations?
Statistics from a survey conducted by the National Center for Health Statistics from Center for Disease Control shows that a little over one-third (36.6%) of adults in America eat it on any given day. That’s about 84.8 million adults eating fast food every day! 83% of American families eat at fast food restaurants at least once a week.
Younger people are more likely to eat fast food than older people, possibly because schools no longer have cooking classes as they did when I was a teenager. Surprisingly, the numbers show that those with higher income tend to consume more fast food than those with lower incomes. (I can’t imagine why except that maybe the poor are eating pasta and beans and the middle class are finding even cheap fast food more expensive than supermarket processed food?
The stock charts of Campbell Soup (CPB) and Mondelez (MDLZ which makes Oreos) resemble the other junk food manufacturers – high P/E ratios with rising stock price.